Largest Spanish banks in H1 2020, by assets

Banco Santander was the largest bank in Spain as of June 2020, with total assets worldwide of roughly 1.57 trillion euros. The other top contenders were BBVA and CaixaBank, with 753.8 and 445.6 billion euros in assets, respectively. The banking landscape in Spain is marked by a large gap that separates leading banks and medium banks, since the latter's assets are far from reaching the volume of the former. Once national assets come into play, however, the situation changes. When the first wave of merges is completed, CaixaBank and Bankia will become the largest bank in Spain and their combined assets in the country will total 665.5 billion euros.

Banking assets

Loans and credits constitute some of the most important assets in the banking industry. The volume of lending to households, companies and other banks in Spain decreased over the last decade, falling from 2.1 to 1.6 trillion euros between 2010 and 2020. Other outstanding banking assets are deposits in central banks and other credit institutions, and financial instruments. As for the latter, Spanish credit institutions make up one of the largest buyers of government debt. A high demand for Spanish Treasury bills and bonds, along with investor confidence and improved credit rating have been driving bond yields down. The average yield of long-term government bonds plummeted after 2012, and by 2020 it was approximately at 0.4 percent.

Bank solvency and liquidity

Solvency and liquidity are both crucial indicators of the banking system’s health, and assets and liabilities play an important role in both of them. Kutxabank and Unicaja were the most solvent Spanish banks as of June 2020, according to the CET1 fully-loaded capital ratio, whereas Santander and BBVA ranked ninth and tenth, respectively. As for liquidity, the ratio between loans and deposits (LTD) decreased substantially between 2010 and 2020, from 149 to 106 percent. A lower A low LTD ratio indicates a good degree of liquidity that allows banks to respond to customer requests for fund requirements.